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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) - March 15, 2000
ELECTRIC FUEL CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-23336 95-4302784
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(Commission File Number) (IRS Employer Identification No.)
120 Wood Avenue South, Suite 300, Iselin, New Jersey 08830
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(Address of principal executive offices)(Zip Code)
(732) 635-7100
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(Registrant's telephone number, including area code)
This is page 1 of __ pages (including Exhibits)
Exhibit Index appears on page __.
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ITEM 5. OTHER ITEMS
On March 15, 2000, Electric Fuel Corporation (the "Company") entered into a
Share and Assets Purchase Agreement (the "MERGER AGREEMENT") with Tadiran
Limited, Tadiran Batteries Limited and Tadiran Electric Industries. Pursuant to
the Merger Agreement, the Company will acquire Tadiran Batteries Ltd., a
subsidiary of Koor Industries Limited ("KOOR") for $40,000,000 in the Company's
Common Stock, which equals 2,335,767 shares, valued at $17.125 per share, and
was the price on March 8, 2000, when the parties reached this agreement in
principle (the "PURCHASED SHARES"), subject to adjustment as set forth below.
The number of total shares of the Company's Common Stock to be issued for
Tadiran Batteries Ltd. is subject to upward adjustment if the average closing
price of the Company's Common Stock on the Nasdaq National Market over the 30
days immediately preceding the first anniversary of the closing date of the
Merger Agreement falls below $17.125, subject to a maximum of 583,941 shares to
be issued. If less than 583,941 shares are so issued, Tadiran Limited will have
an option to purchase, at a price of $20.55 per share, up to such number of
shares of Common Stock representing the difference between (a) 583,941
multiplied by a fraction, the numerator of which is 2,335,767 minus the number
of all shares of Common Stock sold by Tadiran Limited until the first
anniversary of the closing and the denominator of which is 2,335,767, and (b)
the number of shares of Common Stock the Company is obligated to issue in
satisfaction of its obligations under the acquisition adjustment provisions.
Concurrently with the Merger Agreement, the Company entered into a Stock
Purchase Agreement (THE "PURCHASE AGREEMENT") with Koor pursuant to which Koor
will acquire 613,139 shares of the Company's Common Stock, at $17.125 per share,
for a total cash investment of $10,500,000. If, within the 90 days immediately
following the closing date of the Purchase Agreement, the Company issues Common
Stock or securities convertible into Common Stock at a price per share below
$17.125, other than to its employees and consultants under its stock option
plan, then the Company will issue to Koor in accordance with the Purchase
Agreement either additional Common Stock or, at Koor's discretion, warrants to
purchase two times the number of Common Stock that the Company otherwise would
be obligated to so issue.
The closing of the Merger Agreement is subject to certain customary closing
conditions and waiting periods, including, without limitation, the receipt of
the required corporate approval of Tadiran Limited and Tadiran Batteries, the
receipt of the approval of the applicable Israeli governmental authorities, the
receipt of the approval of the Israeli Restrictive Trade Practices Authority,
the closing of the investment by Koor under the Purchase Agreement and the
receipt of a tax ruling of the Israeli Revenue Authority. The closing is
expected to occur on April 15, 2000, or such later date as mutually agreed upon
by the parties.
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In connection with the Merger Agreement and Purchase Agreement, the Company
has entered into a Registration Rights Agreement with Koor and Tadiran Limited
pursuant to which it agrees to provide them certain registration rights.
The Company also has entered into a Voting Rights Agreement (the "VOTING
AGREEMENT") with Robert S. Ehrlich and Yehuda Harats, respectively, the
Company's chairman and chief executive officer, Koor, and Tadiran Limited.
Under the Agreement, each of Robert S. Ehrlich and Yehuda Harats shall vote all
Common Stock or other voting securities of the Company over which they have
control, and take other necessary or desirable actions within their control, so
that Jonathan Kolber shall serve as a member of the Company's Board of
Directors. The Agreement also provides that each of Koor and Tadiran Limited
shall take all such actions with respect to their Common Stock or other voting
securities of the Company over which they have control so that each of Robert S.
Ehrlich and Yehuda Harats shall serve as members of the Company's Board of
Directors.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits. A list of exhibits is given in the Exhibit Index that precedes
-------- the exhibits filed with this report.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
ELECTRIC FUEL CORPORATION
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(Registrant)
Date: March 24, 2000 By: /s/ Robert S. Ehrlich
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Robert S. Ehrlich
Chairman of the Board and
Chief Financial Officer
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EXHIBIT INDEX
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The following exhibit is filed with the Current Report on Form 8-K.
Exhibit No. Description
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99.1 Press Release dated March 15, 2000 of Electric Fuel Corporation.
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Exhibit 99.1
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Koor Industries to Make a Strategic Investment in Electric Fuel
Electric Fuel to Acquire Koor's Tadiran Batteries Unit for $40m in Stock
Koor to Invest $10.5 million in Electric Fuel
March 15, 2000 - Koor Industries Ltd. and Electric Fuel Corporation
jointly announced today an agreement that will allow Electric Fuel to acquire
the Tadiran Batteries subsidiary of Koor Industries Inc., and for Koor
Industries to invest $10.5 million in Electric Fuel.
The companies said that a key purpose of the investment is to speed
the delivery of advanced power sources for the wireless market, including new
internet and handheld devices.
According to the terms of the agreement, Electric Fuel will acquire
Tadiran Batteries from Koor for $40,000,000 in Electric Fuel's common stock,
based on Electric Fuel's closing price of $17.125 per share on March 8, the date
on which the two companies reached agreement in principle. Koor will receive
2,335,767 shares, reflecting a total transaction value of $41.6 million based
on the closing price of $17.8125 on March 14, 2000. The transaction is subject
to the approval of the Israeli restrictive trade practice controller.
Koor Industries will acquire additional 613,139 shares of Electric
Fuel's stock at $17.125 per share, for a total cash investment of $10,500,000.
After the transaction is complete, which is expected to be in April, Koor's
total holdings in Electric Fuel will amount to about 14% of common stock. Koor
will obtain one seat on the Electric Fuel board.
Tadiran Batteries Ltd., headquartered in Rehovot, Israel, is a world
leader in the manufacture and development of high energy lithium thionyl
chloride batteries for critical applications in remote locations and severe
climates.
The acquisition of Tadiran Batteries gives Electric Fuel the
production infrastructure to accelerate production capacity, as well as the
distribution network to reach the global market for its zinc air batteries.
Koor Vice Chairman and CEO, Jonathan Kolber said, "the sale of Tadiran
Batteries to Electric Fuel is an excellent transaction for both sides, granting
Koor a valuable stake in a high growth company traded on Nasdaq."
Electric Fuel President and CEO, Yehuda Harats said, "The acquisition
of Tadiran Batteries is significant to us for a number of reasons. First, based
on Tadiran's 1999 trailing EBITDA figures, the acquisition will generate cash
flow of approximately $6 million for Electric Fuel. Second, the acquisition will
give Electric Fuel access to skilled human resources in all aspects of battery
development, production, quality assurance and marketing. Furthermore, Tadiran
has existing
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production infrastructure, including systems and expertise, that will be
extremely valuable as our ZincAir production line goes into high gear; and
third, Tadiran has developed extensive marketing channels for its batteries in
the U.S., Europe and Asia, especially in the area of sales to OEM's. Lastly, the
Tadiran brand name on primary lithium batteries also is an important asset that
is recognized worldwide."
Koor Industries, headquartered in Tel Aviv, leverages Israeli
excellence in sciences and technology into industrial sectors and businesses
with broad export and earnings potential. Its primary assets include
telecommunications and electronics companies and an agrochemicals company.
For the 9 months ended 9/99, revenues were NIS8.25 billion (over $2
billion).
Electric Fuel, with corporate offices in New York and manufacturing
and R&D facilities in Israel and Alabama, is a world leader in the application
of primary and refuelable zinc-air battery technology to innovative energy
solutions. The company recently introduced its line of ZincAir disposable
batteries for cellular telephones in the US, Europe, South America and Israel,
and is developing additional primary battery products for consumer and
industrial markets.
"Safe Harbor" Statement under the Private Securities Litigating Reform
Act of 1995: Statements in this press release regarding Koor Industries Ltd.'s
business which are not historical facts are "forward-looking statements" that
involve risks and uncertainties. For a discussion of such risks and
uncertainties, which could cause actual results to differ from those contained
in the forward-looking statements, see "Risk Factors" in the Company's Annual
Report or Form 10-K for the most recently ended fiscal year.
NOTE: This press release contains forward-looking statements regarding
Electric Fuel Corporation. There are certain important factors that could cause
results to differ materially from those anticipated by the statements made above
as set forth in Electric Fuel's annual report on Form 10-K for the fiscal year
ended December 31, 1999. Among, but not limited to these factors, are the stage
of development of the Electric Fuel's products, the uncertainty of the market
for disposable cellular telephone batteries, and significant future capital
requirements.
